Commission considers plane emissions tax

Date: 13/05/1999

By Renée Cordes

THE European Commission is examining whether a tax on emissions from aeroplanes would be more effective in combating pollution and easier to implement than a fuel charge.

However, it is not likely to come forward with new policy proposals before the end of the year, after incoming Commission President Romano Prodi and his team have taken office.

The initial findings of an independent study ordered by the institution concluded that lifting the EU tax exemption on aviation fuel would have only limited environmental benefits between now and 2005. This was welcomed by Europe's airlines, which fear that a fuel tax could put them at a competitive disadvantage.

Although the Commission has put the report on aviation fuel, and a more general study into aviation and the environment, on hold for now, officials are exploring the longer-term environmental and financial impact of a tax on kerosene. They are examining what effect a fuel tax would have between now and 2015, taking into account the cleaner technology being introduced by airlines.

Officials are also considering whether it would be more feasible to introduce a tax on emissions, which might be easier to levy on non-EU carriers as well. "A big problem with any kerosene tax is that we cannot tax non-Community air carriers," said a Commission official. "But one can imagine alternative systems which are not faced with these types of restrictions."

The aim of whatever measures are eventually agreed will be to reduce air pollution from civil aviation, amid predictions that it will triple between 1990 and 2014 as the volume of passenger and freight traffic continues to rise.

The German presidency has declared itself in favour of a tax on aircraft fuel, arguing that such a levy is needed to combat air pollution. But the Commission has expressed concern that this would contravene the terms of bilateral agreements between the EU and third countries. Instead, officials have so far argued in favour of leaving it to the International Civil Aviation Organisation, the body which regulates air traffic, to press for a similar measure at a global level.

Environmental campaigners would prefer to see the EU introduce an emissions tax to combat pollution, arguing that it would force air carriers to develop clean technology.

" An emission charge does not have the same legal problems as a kerosene tax," said Paul de Clerck, an aviation expert at Friends of the Earth in the Netherlands. "All aircraft would have to pay for the emissions generated in the European airspace."

A study conducted by Friends of the Earth found that an emissions charge would be easier to apply than a fuel tax. It said that a fuel charge would be more "vulnerable" to economic distortions since airlines could easily pick up fuel and depart from airports outside Europe.